Indian Contract Act and Specific Relief Act
Scope
The Contract and Specific Relief domain tests formation, validity, performance and breach of contracts, and the remedies of damages, specific performance, injunction and rescission. The exam favours problem questions on consideration, free consent, minors, impossibility and liquidated damages.
Core rules
- Sections 2, 10 and 25 of the Indian Contract Act: offer, acceptance, consideration, capacity, free consent and lawful object.
- A minor's agreement is void ab initio; a minor is liable only for necessaries under section 68.
- Section 56: a contract becomes void if performance becomes impossible by an event beyond the promisor's control.
- Section 73: damages for actual loss suffered, including loss naturally arising and loss within the parties' contemplation.
- Section 74: reasonable compensation for breach where a sum is named, not automatically the full sum.
- Specific Relief Act 1963 (as amended in 2018): specific performance is no longer exceptional for contracts concerning immovable property; it is the general remedy, subject to section 14 bars and court discretion.
Worked example
A agrees to sell land to B for ₹40 lakh; A refuses and sells to C. B may sue for specific performance because the contract is certain, B is ready and willing, and damages are inadequate. If B had delayed and speculated on price, the court could refuse discretionary relief.
Traps
Past consideration is valid in India, but past voluntary services need not always support a fresh promise. Do not award a penalty as a matter of course; section 74 requires proof of loss. Specific performance is not available for personal service or a contract requiring constant supervision.